The energy picture in the United States looked bleak in 2006.
Natural gas was hard to find and oil production was in steep decline. The Iraq War and China’s growing economy altered the energy scenario. U.S. oil producers had largely given up on new discoveries on American soil. A new energy crisis seemed likely.
That’s when a handful of men succeeded in tapping massive deposits of oil and natural gas that major energy producers like ExxonMobil, Chevron and other giants had dismissed.
They were determined old-style wildcatters and entrepreneurs who started an energy revolution from shale deposits in Texas, North Dakota, Pennsylvania, Oklahoma and Ohio. They risked their careers to prove the world wrong. What they accomplished against all odds had been unthinkable only a few years before.
That story is the basis of a fascinating new book, The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters (Portfolio/Penguin, $29.95) by Gregory Zuckerman, a veteran reporter with the Wall Street Journal.
It will be released on Tuesday (Nov. 5).
Zuckerman looks at successes, failures and struggles of seven colorful and bigger-than-life men:
•George Mitchell of Texas-based Mitchell Energy. He and his team spent 17 years trying to perfect the technology that made fracking possible. He pocketed more than $2 billion, although his main goal was keeping his company afloat. He died last summer. Zuckerman likens Mitchell to Henry Ford and Alexander Graham Bell. Engineer Nicholas Steinsberger was the man behind Mitchell’s push to perfect fracking.
•Aubrey McClendon and Tom Ward who founded Chesapeake Energy Corp. The Oklahoma-based firm is the No. 2 natural gas producer in the United States and the No. 1 player in Ohio’s Utica shale. The two one-time landmen turned $50,000 into mineral rights on 15 million acres. They have both been ousted from their company and are now involved in new drilling efforts with other companies. McClendon in 2008 lost $2 billion on what Zuckerman calls a misguided gambit. The book is a quasi corporate history of the early days of Chesapeake Energy.
•Robert Hauptfuhrer and Texas-based Oryx Energy that developed horizontal drilling. It was once the largest independent energy company in the U.S.
•Harold Hamm of Oklahoma-based Continental Resources, the son of sharecroppers who was determined to find crude oil in North Dakota before others. He has succeeded in the Bakken shale and is now worth $12 billion. He is one of the richest individuals in the U.S.
•Charif Souki of Cheniere Energy, a dashing Lebanese immigrant investment banker. He spent years trying to convince others to import natural gas. It was only when the shale boom began developing that he made his fortune by deciding to export liquefied natural gas from Louisiana to other countries.
•Mark Papa of Texas-based EOG Resources. He was an Enron castoff, who realized that his firm was not prepared to deal with America’s shale boom. He built a $41 billion oil power by secretly leasing land for 2.5 years in the Eagle Ford shale of south Texas.
Those seven names may not mean much to most readers. They are not everyday names. McClendon is the best-known name. He is closely tied to Chesapeake Energy’s dominant role in Ohio’s Utica shale before his departure from the company. He is back in Ohio with his new firm.
These seven key figures were ambitious and headstrong, according to Zuckerman. They operated on the fringes of the oil industry and ignored the ridicule of co-workers and the industry to pursue shale riches, he wrote.
Many of those men struggled for years just to keep their companies afloat.
They made billions of dollars and, in some cases, lost billions of dollars.
Zuckerman’s book, based on more than 300 hours of interviews with more than 50 key players, is a look at America’s new shale tycoons. It is an up-close look at America’s new entrepreneurial culture that spills into Hollywood and professional sports teams.
His 404-page book is a great read on the history of shale drilling and hydraulic fracturing or fracking. It is an interesting and first-rate narrative. It explains how an energy revolution began, one that continues today.
The book may be the definitive story of the innovative men behind the most significant energy discovery of our time.
They went after oil and natural gas in compressed or tombstone-looking rock deep underground.
By 2020, the U.S. may pump more than 11 million barrels of oil per day, its highest figure ever. That is more than Saudi Arabia produces today.
The U.S. is the No. 1 natural gas producer in the world, thanks to shale drilling. Production has soared 20 percent in the five years since 2007. The U.S. should have enough natural gas to last for decades.
What Zuckerman’s frackers accomplished will continue for decades to impact individuals, companies and governments around the globe. What he calls the shale gale is benefitting consumers and the American economy.
Zuckerman tells the dramatic tale of how they succeeded and shaped an energy revolution. "Those responsible for the remarkable period skirted danger every step of the way, risking their reputations and livelihoods for the discovery of a century," he wrote.
He spins a colorful and interesting tale filled with details.
McClendon is a cousin by marriage to super-model Kate Upton. He is an owner of the NBA’s Oklahoma Thunder and he was once fined by the league for making comments about moving the team from Seattle to Oklahoma City.
McClendon, a wine connoisseur and a map lover, is known to be a self-promoting salesman. Forbes magazine calls him the most admired and most feared man in the drilling industry. He is known for directing massive land grabs to acquire drilling rights and for borrowing billions to fund such operations.
Souki once owned Mezzaluna, the restaurant in Los Angeles where waiter Ron Goldman and patron Nicole Brown Simpson knew each other. He also knew her ex-husband, O.J. Simpson. He married New York model Rita Tellone. He loves skiing in Aspen, Colo.
Hamm’s pending divorce from his wife of 25 years, Sue Ann, may set American records for how much money his wife will get. He served as an energy advisor to Republican presidential candidate Mitt Romney. He was raised dirt poor in rural Oklahoma
Ohio’s Utica shale that took off in 2010-2011 with leasing plays a very minor role in Zuckerman’s book.
Zuckerman acknowledges the key role that Range Resources engineer Bill Zagorski played in getting Pennsylvania’s Marcellus shale development started.
In 2003, Zagorki was directed to find the next big shale for oil and gas. Those efforts failed.
Zagorski then took a trip to Alabama where a friend was involved in drilling and was having success with a shale.
He realized that his team had been drilling through the Marcellus shale in Pennsylvania. He returned and drilled new test wells that showed the Marcellus was rich with natural gas.
Zuckerman says the environmental threat from fracking is less of a threat that critics contend but more of a problem than the industry admits. It may be years before the full impacts of drilling and fracking are known, he says.
He suggests that drillers should eliminate trade secrets in chemicals used in the fracking process as a first step.
Most problems, he says, can be remedied in a properly regulated environment.